Business
Doug McHoney (PwC's US International Tax Services Leader) and Aaron Junge (Tax Director in PwC's Washington National Tax Services office) go deep into attribution and determining ownership, focusing on Section 958(b)(4). Doug and Aaron discuss attribution: what is it, and why is it important; Section 318; the history of ‘downward attribution’; the perceived abuses under Section 958(b)(4), including how attribution rules affect CFC determinations, and how those determinations affect ‘toll charge’ calculations and Section 267(a) downward determinations; legislative history, congressional intent, and the potential for legislative fixes to the perceived abuses; how the recently proposed regulations affect downward attribution; when the proposed regulations will become effective, and how taxpayers can retroactively rely on the regulations; and finally, relief provided by Revenue Procedure 2019-40 - how it may allow for using alternative information, and its impact on compliance considerations like Form 5471 filings.